Network & Inventory Optimization for a Large Automobile Manufacturer’s Spare business in India
Posted in Case Studies
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The Customer
The customer is one of the leading Automobile manufacturer, an Indian Multi-National Company. The company produces passenger cars, trucks, vans, coaches, buses, luxury cars, sports cars, construction equipment.
The Problem
Customer was redesigning its network and inventory strategy to reduce the burden of carrying inventory from the dealers of spare parts
High Network Freight Cost due to direct low volume shipments to the dealers
Substantially High Network Inventory due to very high volatility and high replenishment frequencies
Low Fill Rate due to demand volatility
The Complexity
As-Is Network
Recommended Network
Over 5 million Product-Location combinations to improve FFR for the dealer network
Solution
Delivered a 2 step solution using rhythm by optimizing the Distribution Network and then optimizing the Inventory norms to minimize the inventory at the dealer locations to release their working capital while maintaining the fill rate to the end Customer
Multi Scenario Recommendations
Final Results
Customer (Dealer) Inventory
Warehouse Inventory
